West Virginia begins look at Marcellus shale offshoot project

Ralph Wilson / AP PhotoIn this April 23, 2010 photo, a Chesapeake Energy natural gas well site is seen near Burlington, Pa., in Bradford County. Marcellus Shale stretches deep beneath Pennsylvania, New York, West Virginia and Ohio. Some geologists estimate it's enough to supply the entire East Coast for 50 years.

SOUTH CHARLESTON, W.Va. (AP) — West Virginia could expect more than 2,300 direct jobs from building a plant to convert a byproduct of Marcellus shale natural gas drilling into a chemical industry staple, the task force assigned to this topic learned Wednesday.

State Commerce Secretary Keith Burdette provided fellow members of the Marcellus to Manufacturing Task Force with the estimate. He counted 498 indirect jobs from the construction of such a facility. Placing its price tag at $1.5 billion, Burdette also said that building it would induce 3,500 more jobs throughout the state's economy. He noted afterward that his estimates don't include the direct, indirect and induced jobs from running the actual facility.

"The impact would be significant," Burdette told the task force. "But the real value is that it will reinvigorate the chemical manufacturing industry."

The task force held its first meeting, at the West Virginia Education, Research and Technology Park, since Gov. Earl Ray Tomblin formed it earlier this year. Its key goal is to attract and encourage employers who convert ethane, a compound removed from natural gas during the refining process, into the widely used chemical compound ethylene.

Kurt Dettinger, Tomblin's general counsel and a task force member, said West Virginia appears to have most of the needed ingredients: pipelines, chemical factories and the gas wells themselves.

"We're confident that we're well-suited to attract one or more crackers to West Virginia," Dettinger said, adding that other states are seeking them as well.

Dettinger referred to thermal or steam cracking, a process used to convert these chemicals. Kashy Aminian, a professor of petroleum engineering at West Virginia University, outlined the process during the meeting. He also cited an emerging technique that involves chilling the gas to form ethylene.

Texas and Louisiana host nearly all of the U.S. cracker plants, Aminian said. He noted that drillers in neighboring Pennsylvania have considered adding to existing pipelines to send their ethane to Louisiana, for want of a more local facility.

Caiman Energy Chief Executive Jack Lafield, one of several industry leaders on the task force, estimated that West Virginia's Marcellus wells produce between 150,000 to 200,000 barrels of ethane a day. A modern cracker needs 60,000 barrels a day, the group was told.

Don Garvin, representing the West Virginia Environmental Council on the task force, noted that legislators this session proved unable to pass new regulations for Marcellus gas drilling. He questioned whether the group might take up the topic or related issues.

"Is ethane that's separated subject to royalties?" he asked. "Have we looked at those kinds of issues?"

Industry members said individual lease contracts would address that question. Dettinger noted that the group's focus is developing the drilling byproduct.

"We can only accomplish this if we have a long-term robust flow of Marcellus," added Scott Rotruck, a vice president at Chesapeake Energy.

The task force plans to pursue its mission through subcommittees devoted to such topics as production and storage, transportation, and economic development.